23 Sep, 2019 | Bankis
Founded in 1841 Thomas Cook had grown to a massive global travel group, with annual sales of £9bn and around 19 million customers a year together with a silver history, including being nationalised in 1948 as part of the state-owned British Railways. However, just as the travel world had developed, so the leisure market has also changed, at a faster pace than in previous decades.
The firm's fate was connected to a number of factors including financial, social, meteorological and political. Apart from weather issues, and tough competition from online travel agents and low-cost airlines, there were other factors, including political unrest around the world and recently Brexit uncertainty future. In addition, many holidaymakers had become used to putting together their own holidays and not using travel agents. In May, Thomas Cook reported a £1.5bn loss for the first half of the financial year, with £1.1bn of the loss due to write down the value of My Travel, the business it merged with in 2007. However, it warned of "further headwinds" for the rest of the year and said there was "now little doubt" that Brexit had caused customers to delay their summer holiday plans.
The company then put its airline up for sale in an attempt to raise badly-needed funds. Thomas Cook later announced it was in advanced talks with its banks and largest shareholder, China's Fosun. Thomas Cook hoped to secure funds from Fosun, but the creditor banks issued a last-minute demand to find an extra £200m, which Thomas Cook was unable to do. The company spent all of Sunday in talks with lenders trying to secure the additional £200m funding but with no luck and trust from investors and creditors. The company's boss, Peter Fankhauser, said the firm had "worked exhaustively" to salvage the rescue package and it was "deeply distressing" that it could not be saved.
For those stranded abroad a government rescue plan to bring them home via the Aviation Agency has been put in place and the repatriation has already begun. Most air package holidays sold by travel companies are based in the UK ATOL protection which should seek refunds for those who have lost their holiday with Thomas Cook. This protection means that if the business collapses while travellers are away on holiday, they will be able to finish their trip and then travel home. If a business folds before someone's trip, the scheme will provide a refund or replacement holiday.